Louisiana ethanol production plant waiting on short-term loans

Sugarcane grown in the Southern United States could become ethanol, if funding is secured. Image: Flickr / arriabelli / CC-BY-SA

A company that has been trying since 2006 to make Louisiana ethanol is still waiting on funding. Louisiana Green Fuels is hoping to purchase a syrup mill from the state. Until short term loans or funding solutions are secured, several plants will sit idle.

Louisiana Green Fuels, LLC

Founded in 2006, Louisiana Green Fuels, LLC, has the goal of creating ethanol from sugarcane and other Louisiana agricultural crops. Louisiana Green Fuels started the process to purchase a sugarcane syrup plant originally built by the state. The last of four $100,000 payments to the state is due by Louisiana Green Fuels in December of this year, at which point the company is required to start making $2 million payments on the $60 million principal.

Creating sugarcane ethanol

The cost of starting up the plant for production of sugarcane ethanol is estimated to run between $60 million and $200 million, depending on agricultural product prices and other costs. Briefly in 2009, the syrup mill and connected ethanol plant ran just long enough to create sorghum syrup and sugarcane syrup test runs. When an investor pulled out, however, production had to be stopped. Once the production is up and running, Louisiana Green Fuels has already brokered agreements to sell the byproducts of the ethanol production.

The problem with Louisiana ethanol

Louisiana Green Fuels hopes to create ethanol biofuels from agricultural products grown in the state. Farmers in Louisiana, however, are facing very difficult times. A hard freeze ruined several sugarcane crops, and many agricultural products are being sold at a loss or at cost. Several farmers are requesting emergency loans through the U.S. Department of Agriculture. The U.S. Department of Agriculture is also offering short term loan guarantees for Louisiana Biofuels. In short, Louisiana Green Fuels may soon be producing biofuels, but only if long- and short-term funding, agricultural products and governmental support can be secured.